The US SEC is investigating Marathon Digital Holdings for a potential violation of federal securities law. The investigation relates to an agreement reached between Marathon and Beowulf Energy last year.
The U.S. Securities and Exchange Commission (SEC) has subpoenaed cryptocurrency mining company Marathon Digital Holdings, according to a quarterly filing. The SEC is investigating Marathon for violating federal securities laws, according to the document.
The investigation is linked to a partnership for a Montana data facility, which was a collaborative effort with Beowulf Energy in October 2020. Marathon and Beowulf Energy reached a first agreement last year, with a focus on the development of low energy consumption mining solutions. . In exchange for relocating its bitcoin mining center near a Beowulf energy station, the latter would receive Marathon shares.
The Marathon share price fell 27% on the news. Even so, prices are still significantly higher since the start of the year, indicating how well crypto companies have performed this year.
The SEC is stepping up its scrutiny of the cryptocurrency market, with several subpoenas and lawsuits filed over the past 12 months. It is clear that it is now determined to bring order to the market, as other US authorities begin to review the regulations from their own perspective.
Crypto companies on the SEC’s radar
The subpoena issued to Marathon is just one of many actions the SEC has taken to curb potentially illegal activity. For many years, the SEC sat on the sidelines, simply watching the market. Some market enthusiasts hoped for a more involved approach in order to bring some legitimacy to the market.
It seems the time is right, with a regulatory framework also likely in the months to come. SEC Chairman Gary Gensler alluded to this, suggesting a crypto regulatory agenda during Senate testimony. Republican senators, however, have pushed back the agenda, so it’s not clear if it has since changed.
But while investigating crypto companies, he also endorses bitcoin futures ETFs, which is a positive sign for the market. Spot Bitcoin ETFs, however, do not reach the SEC, and it may take longer for them to reach the market.
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